My husband 52 and I (61) retired one year ago. We have close
to $2 million in assets (stock, mutual funds, and life insurance with
convertible option, not including equity in current home). Our living expenses
for 2007 were $58,000. I predict this level of spending for the foreseeable
future. In 2007 we sold one of our homes for a net profit of $100k which we
invested. We are currently living in our 2nd home, a condo on the
water, which we own, free and clear.
We would like to move out-of-state for lifestyle issues. Due
to the current market, properties in this area are either not selling, or
selling at 25% less than a year ago. If we reduced the price to sell at this
point, we could sell for $150,000. We paid $100k 10 years ago, but would like
to hold it and rent for a few years until the market improves.
We could rent out this condo for a net profit of $2,000 per
year.
Properties in the area where we want to move are selling for
a minimum of $200k up to $300k. At the low end, we would have to reinvest all
of our profit from our two home sales. At the high end, we would have to
reinvest and take out a small
mortgage. We could rent in this area for $1200 per month. A one year bridge
loan would require 10% down and 5 1/2% interest. One year will not be enough time
for the local market to rebound.
My gut feeling tells me to at least rent a dwelling in the new locale until the local market
improves and we can get more equity out
of our current condo, but even then, would it make sense to continue renting instead
of paying cash for a new home or even taking
out a partial mortgage on the home? Any benefit to preserving the reverse mortgage
option for future cash flow?
Thanks, LindaW
